When meeting the funding requirements for a Top Heavy plan you have to fund at least 3% or if less what the highest contribution percentage was for the Key employees. How is the percentage for each of the Key's calculated if there are ADP/ACP refunds involved? Would you back out the refund and then calculate what their contribution rate was for the year? For the plan in question, the highest Key contributed 3.3%, but is going to be getting back most of it due to ADP failures. So do I use 3.3% or do I figure up the percentage after the correction and use that as the minimum funding percent for the top heavy contribution?

We're having a lively discussion in our office over what our recommendation should be to clients who merged their MP balances into PS plans. Should we recommend that all balances now be subject to the QJSA or only the merged MP balances?

One concern expressed is that we screw up and not get the spouse to sign off on a MP distribution if the wrong form is used since new participants, not having MP balances, won't have any portion of their distribution subject to QJSA.

Another concern is if the PS exception is maintained, there presumably would be two distribution forms, one for the PS with no spousal consent and one for the MP with spousal consent. (And a lot more work.) Could one form be used for the particpant with MP and PS balances in which the spousal signature is required even if the exception applies for the PS balance?

Would one form be acceptable if a caveat was added that the spousal consent only pertains to the MP balance?

Facts:

New 401(k) Plan effective- January 1, 2002.

Open enrollment done on October 15, 2001 informing all employees hired as of that date to be able to start contributing in the Plan as of January 1, 2002.

Can you pick October 15, 2001 as the dual eligibility date? Anybody hired between October 16, 2001 and December 31, 2001 would have to meet the eligibility.

I don't think October 15, 2001 could be used as a dual eligibility date since it is a date before the plan goes into effect. The earliest dual eligibility date would have to be January 1, 2002 when the plan was first effective.

Any feedback would be appreciated.

Thank you.

We have an employer interested in adopting Safe Harbor Match and wants to change the minimim deferral contribution percentage currently listed in the adoption agreement from 1% to 3%. Would he be able to do this or would this be discriminatory against the NHCE's?

Please advise / confirm on the following:

We administer accounts which run July - June

and September - August. Would we be correct that the July - June groups should now be filing with the "2000" form for the year 2000-2001 (going by the START date of the plan year)???

What happens if our accounts call to get the forms from the IRS and they are told that they are on back order - - - and as a result will not be able to file in a timely manner?

Any and all advice, recommendations, suggestions appreciated.

Many government plans include death benefits that are payable to the participant's children until they attain age 18. Some plans we've seen also continue payments to the surviving spouse until his/her death or remarriage. Is this a violation of the 401(a)(9) five year payout rule? Since the plan dictates the spouse and/or children as the beneficiaries, it does not appear that they are treated as "designated beneficiaries".

Has there been any change to the 457b distribution rules to allow for an in-service distribution other than for hardship or purchase of service credit? For example, are in-service distribution available at age 59 1/2, such as is available in qualified plans that allow for such?

457 Rollover: I am a retired county employee taking 457 Plan distributions. I understand the federal tax law has changed to allow me to rollover my 457 $ into an IRA. Is this so?

I also understand California has not adopted similar legislation. Is this also true?

My question: Can I rollover my 457 $ into an IRA? If I do, what problems, if any, might that create?

Our plan allows beneficiaries of deceased employees to keep the employee contributions in the plan in a special "beneficiary account." If the situation arises where a beneficiary who has money in such an account later dies, would the spouse of that beneficiary be allowed to roll that money into his or her own retirement plan or an IRA under EGTRRA? :confused:

I am currently looking for recommedations for an in-house recordkeeping software for our existing ESOP. Any information would be appreciated.

The employer I currently work for does not provide any tuition assistance. I was wondering, if my employer paid for me to go to Graduate School would they be able to write off all of the expenses on their corporate taxes (we are a company of approx. 70)? If the company pays my tuition and books what costs do they actually incur?

Employer stock held in ESOP is registration-type security. With regard to pass-through voting, do all items that are voted on at a Board meeting have to be voted on by participants in the ESOP? Is there any type of de-minimus exception? Can nonvested participants with employer stock allocated to their accounts be excluded from voting? :confused:

We have a tuition assistance program. Employees enrolled in a university submit a bill from the university that shows the fee for the number of units the person is enrolled, plus the student registration fees plus student body fees and medical care access fees.

Can we reimburse for the student body and medical care access fees and registration or just the tuition?

Our written program says we'll reimburse for tuition and books.

We have a POP plan with medical, dental and group life. We also allow employees to purchase cancer policies. We have a couple of employees who have coverage through their spouses. While our plan is primary, they have excellent coverage elsewhere for very little premium. Could we ask them to accept a cash amount to opt our of our plan? It would save the company money especially since we are self-funded.

I want to convert my existing Traditional IRA to a Roth. Will I have tax implications? I don't think so, but I want to be sure before I take this step. Another question is, "Should I do this? What's the advantage of staying traditional vs. going Roth?"

Here's background:

$6000.00 in non-deductible contributions over 3 years '98, '99, and '00. Now worth $5,500.00.

May a cash balance plan freeze accruals on an annual basis to provide participants with the ability to elect in or out based upon what the cash balance contribution requirements are? I understand that this is a common approach. If partners are in the cash balance plan, how does this avoid the cash balance plan being considered CODA? Any thoughts? Thanks. Ed

Can someone tell me if TAMRA 1988 is still in effect as it pertains to COBRA Compliance Program?

In a 401(k) plan in lieu of getting particiapnt to complete a Form W-4P, how does one withhold?

Only the minimum is being paid

It is my understanding that you must give the participant the choice to opt out

But if W-4P either not given or not returned, what do you do?

Thanks

Can a Canadian company who has a US office establish a retirement plan for the US employees in the US office? The US office employees are US citizens who receive US income and the US office is not a subsidiary of the Canadian company.

We are having problem with importing plans back on to our network. 2 of us work remotely and must import our plans back on to the network after they are complete. The first 2 problems we had were with census notes for a participant in plan ABC getting imported into plan spec notes for plan XYZ. Not a critical problem but annoying.

Now we have an incident were employer 123 was eliminated from the employer list and the plan for employer 123 was assigned to employer 789. Employer 789's employer information is now in the plan specs for plan 123. This is a big problem!! :eek:

Is anyone else having problems with corruption of data after importing plans?????? Please respond and also please let Relius Support know.

I know this plan import thing is tricky and we try to carefully review all the conflict messages we get when importing.